9911796707
TMI Blog2007 (10) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... oration (hereinafter to be referred to as the claimant) is a partnership firm. Prior to 1966, the appellant No.2 before us (hereinafter to be referred to as 'the security press') was importing its entire requirement of gummed stamp paper from foreign countries. From 1967 onwards the security press commenced purchasing of Ashoka Pillar water mark stamp base paper from Paper manufacturing mills. The base paper was thereafter gummed and super-calendared by the contractor on a job work. In 1967 the claimant established a pilot plant for purpose of manufacturing gummed stamp paper at the instance of appellant- security press. The claimant set up the factory at Umbergaon in Thane district and the plant was commissioned in 1969. The claimant received orders for gumming and super-calendaring of stamp based papers. In the year 1976 the appellant for the first time floated tender for gumming and super-calendaring work. Again in 1989 the Security press floated tender and the claimant questioned the action of the security press by filing writ petition before the High Court but did not succeed. The tender was again floated in 1996 and the grievance of the claimant was that though the offe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credit and the security press shall issue necessary documents including the gate passes to enable the claimant availing modvat credit. The security press while placing the orders on 31.5.1994 added a term that the modvat credit if any, availed by the claimant will have to be passed on to the security press. The claimant by its letter dated 5.6.1995 agreed to accept the order subject to withdrawal of the term relating to passing of modvat credit to the security press. The claimant stated that only on confirmation/ modification of this condition that it would proceed with the execution of the contract. The security press did not respond but forwarded base paper to the claimant to carry out the work of gumming and super-calendaring of base paper. The finished goods were delivered by the claimant along with necessary documents including the gate passes for endorsement by the security press. The claimant used to remind them from time to time that the modvat credit is only available to the manufacturer i.e. the claimant. It appears that no positive response was given to the claimant. On 16.10.1995 the appellant- security press for the first time informed that the matter would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cates will be issued, as per requirement." This was one of the terms and conditions of the purchase order. It is true that when the advertisement was issued there was no such condition but when the purchase order was issued it clearly stipulated this condition and it was accepted by the claimant, though it protested which is evident from the communication dated 5.6.1995 which reads as under : GANDHI INDUSTRIAL CORPORATION SPEED POST GIC/ISP/S.O.291/95/079/95-96 5.06.1995 The General Manager, India Security Press, Nashik Road, C.Rly. Dear Sir, Reg: Your S.O. No.PR-30(Adh)/291/95 dt.31.5.95 For Gumming Supercalendaring of all over Ashoka Pillar Watermarked Stamp Base Paper Reels and Cutting into Reels Sheets. We acknowledge the receipt of your above referred Supply Order dt.31.5.95 and have to inform you that since there was considerable delay in its finalization, our entire costing has gone awry as our plant and labour, all tailor made only for doing your above said job have remained idle for the last 5 months, putting us to a great loss. Our capacity utilization during 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der any circumstances. The aforesaid communication dated 30.12.1995 is reproduced as under : "GOVERNMENT OF INDIA From The General Manager, India Security Press, NASIK ROAD-422101 Reference No.15858/PR-30(ADH) Dated 30/12/1995 To M/s Gandhi Industrial Corporation, 20, Ajmal Road, Opp. Malaviya Road, Vile Parle (East) BOMBAY-400057 Sub: ISP Order No.PR-30(ADH)/291/95/ dated 31/5/1995 Sir, Further to this office letter No.10866/PR-30 dated 16/10/1995, it is to inform you that since the Modvat Credit is directly linked with the payment of Excise duty indicated in the terms and conditions of the tender as well as the referred order, the benefits, if any, will have to be invariably passed on to the India Security Press and this cannot be waived under any circumstances. 2. Hence, you are advised in your own interest to arrange to pass on all the benefit availed against Modvat Credit immediately. Yours faithfully Sd/- (B.S.LALCHANDANI) DY.GENERAL MANAGER" Then, again on 12.1.1996 the claimant tried to argue with the appellant that the modvat credit is only available to the manu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacturer and it was clearly understood that this will go to the claimant. Therefore, the view taken by the Arbitrator, affirmed by learned Single Judge and the Division Bench of the High Court is correct and in support thereof, invited our attention to a decision of this Court in Ramji Dayawala Sons (P) Ltd. v. Invest Import [(1981) 1 SCC 80]. This case was decided on the question of fact only. In the present case as mentioned above, the terms and conditions were very clear and despite the protest by the claimant for deletion of the modvat credit benefit, it supplied the goods and it was informed that change in the supply order cannot be acceded to. Therefore, there is no question of any principle of sub silentio. There is no ambiguity or any tacit understanding. Learned counsel further submitted that the finding of the Arbitrator should not be interfered with because the Arbitrator is the best judge and the Courts should not interfere with the finding of the Arbitrator or the interpretation given by the Arbitrator. In support of his contention, learned counsel invited our attention to the decisions of this Court in Oil Natural Gas Corporation Ltd. v. Saw Pipes Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sis of the clear terms of the contract, the claimant is bound by it and it has to restore whatever the modvat credit received by it to the appellant-security press. The view taken by the Arbitrator that since it was not the condition when the tender was floated is not correct as after the complete contract having come into existence, there is no purpose to refer to the terms of tender. What is binding is the completed contract and not the terms of offer of the advertisement. Whatever may be the offers in the advertisement, once the completed contract has come into existence, this is binding. There is no two opinion in the matter in the present case that the terms and conditions of the supply order dated 31.5.1995 were complete. Therefore, what is binding is the terms of the contract and not the terms in the offer of advertisement. Therefore, under these circumstances the view taken by the Arbitrator as well as learned Single Judge and the Division Bench of the High Court is ex facie illegal. It is true that normally the Courts are very slow in interfering with the finding and interpretation given by the Arbitrator. So far as the principle of law is concerned, there is no two opi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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